Customers and Customer Value Essay

marketplaceing involves1.Managing emolumentable customer relationships2.Aw atomic number 18ness attracting/retaining customers3.Increasing a customers willingness to payBreadth and Depth of marketMarket people with desire and ability to buy a specific harvest all organizations market and people market themselvesDating, PEYoIdeas and cheers atomic number 18 marketedBuyers whitethorn be resistent than contain customer (B2B, B2C)Social Marketing modulate behavior of individuals, benefit to individuals or society non marketer Anti-smokingConsumer behavior (B2C/B2B)Heart of market run intoing needs and wants of consumers better than competition oValue is completely what is perceived by consumer customers identify solutions for delivering customer value, not in terms of attributes Fundamental Principles of MarketingoWhat atomic number 18 drivers of customer value? Their benefits/ comprisesConsumersWho argon the competitors that satisfy the identical needsThe competitorsO ffer a harvest-feast/service whose attributes deliver the value as good as or better than the competitors The CompanyMethods of Disc oering customer behaviorNeeds psychological neediness (food, shelter) requisites Needs shaped by culture and the individual (burger vs. Tofu) oQualitative queryQuantitative ResearchFeedbackCompetitive intelligenceSocio-economic tr break offsConsumer bribe decision carry outBuyers may skip a stage depending on how involved they are in the purchase oHigh involvement if intersection point isExpensiveSerious personalized consequencesReflects social imageHigh involvement results in cipheration of more(prenominal) brandsMore product attributesMore informationrmation sourcesMore clock exhausted searchingHigh involvement bid education nigh family and info on product blue involvementBuyers react to determine, convenience and familiarityThe Marketing Process hear Consumer Needs & WantsNeeds Psychological deprivation (food, shelter, etc.)Wants Needs shaped by culture and the individual (burgers vs. tofu) oSegment, Tar ache and blank space (STP)Segmentation and Tar quivering Who to ServeChoose which customers to servePositioning How to ServeIdentify key benefits of offering, points of difference with rivals o stick and Execute a Marketing program ground on the Marketing Mix (4 Ps) outputFeatures, brand name, packaging, service, warranty markOutlets, assembly lines, coverage, transportationPriceList price, rebates, fires, payment periodPromotionAdvertising, gross revenue promotional material, merchandising, personal exchange, publicity How to Position yourself with customersMarket leaderEncourage usual purchase, keep flavor high gear, reinforcing ads, void stock outs ChallengersEncourage variety pursuanceEncourage trial (coupons), try something new adsBuild expediencyable client RelationshipsBasic Relationships (low-margin customers) vs. Full Relationships (key / dominant customers) Frequency selling programsRewar ds, encourage customers to clear moreClub marketing programsOffer members discounts for being memberclient SatisfactionSatisfied customers are loyal (migrate rate of 5%) shade company to others (tell average of 3 others)Less price handsomeCustomer DissatisfactionMigrate at 40%Dont complain (96% neer report back)Tell average of 11 people about problemsoManage produce PortfolioShould you keep all your products?Should market them all the same way? crowd out you outgrowth the products in your portfolio?BCG addition Share MatrixMarket Growth Rate (y-axis) vs. Relative Market Share (x-axis) High High StarsLow High Cash CowsHigh Low Question markLow Low DogsMarketsProductsCurrentNewCurrentMarket Penetration-Selling more products in live marketsProduct cultivation -Selling new products in existing marketsNewMarket schooling-Selling existing products in new markets (geographic or new segments)Diversification -Selling a new product in new marketsHow your product portfolio coul d be expandedTim HortonsMarketsProductsCurrentNewCurrentMarket Penetration-High niggardness in geographic area-Heavy advertising-High make to be franchisors-Regularly upgrades facilitiesProduct Development-Bagels and cappuccino-Sandwiches, wraps, soupsNewMarket Development-Expansion to campuses-TimShop (online)-Expansion into U.S.Diversification-Partnered with U.S.-based Cold St star Creamery strap 75 steps of STPoGroup potential emptors into segmentsGeographic, demographic, psychographic, behavioralHow do organizational buyers differDemand for your product is derived from demand of buyers product Fate tied to buyers indispensablenessCommon to take aimFew dominant customers and long term relationshipsProvide competitive bids pass water multiple people involved in the purchaseTo increase likelihood of B2B conquestUnderstand the purchasing organizations needsUnderstand the organization get processoRight bidding list, who is influential and who to pay attention to oGroup produc ts to be sold into categoriesMultiple products with some jet trait ( frequently consumer type) Useful where multi consumer type, each with own needs, but not one product to meet all needs note vs commercial aircraftDevelop Market/product grid and estimate size of market conduct Target MarketsExpected Financial PerformanceSize and growth, purchasing power, benefitCompetitive PositionCompetitive in segment now and over cartridge holderAccessibilitySegment can be reached and served at tenable priceFit with the OrganizationYou can deliver an effective marketing programoTake marketing actions to reach target market4 PsProduct positioningHead-to-head or DifferentiationChallenges in dislodgeingTo change how consumers view an offering relative to competition oHuge advertising cost to change beliefs of peopleConsumers may be confused about what your brand stands for oConsumers may not buy your claimWhy repositionReacting to competitionNew Balance vs. NikeReaching new market coffee milk for adultsCatching a rising trendHealth trendsever-changing the value addedTrade down or upLecture 8First P in 4 Ps (Product) unmanageable to do riseo90% of new products fail in first courseoCommon among successesUniquely, superior point of differenceHas to work well, has to be valued in the marketLecture 9 Pricing and bears2 Ps Price and PlacePriceThe money exchanged for ownership of goods/ goPrices involves perception of value and will varyCheaper price for equivalent prime(a) has higher valueHigher price can signal quality (watches, cars)There is a tradition of getting stuff for free or very cheap over internet that is hard to change (vs. by phone or TV) Pricing matters a lotAffects customers view interchange starts with determine,Goes more generally to marketing than schemeWhy change your price?Demand, cost, competitionHow will people reactPeople place agiotage on option, if tang getting less, will be dissatisfied and feel violated Market mix over product life history roulette wheel for price (in order of 4 stages) oSkimming penetration, gain market voice, defend market, hang on profitable Factors affecting set decisionsoInternal FactorsMarketing objectivesMarketing mix strategies beOrganizational considerationsExternal FactorsDemandCompetition, resellersEconomyGovernmentSteps in setting pricesIdentify pricing constraints and objectivesConstraintsDemand, stage in product life cycle, single vs product line, cost of producing, marketing, changing prices, Competitive market and competitors ObjectivesProfit or just survival gross gross sales and or market share (revenue, unit volume)Social responsibilityEstimate demand and revenueAll else being equal, as price falls, demand increaseExcept for sumptuosity goodsDemands also affected byoPrice and availabilityIn let directsChanging buyer tastes and preferencesMarketing Managers want to know price elasticity of demand % change in quantity demanded relative to % change in price oSlope of demand cut downElastic demandSlight decrease in price, steep increase in demandSubstitutes usually (no alternatives usually non elastic) oEstimate Cost, volume, profit relationshipsTotal cost = total amend cost + total variable costsBreak-even epitome (sales equal costs)Determines profitability at different levels of salesBEP = Total fixed cost / (unit price unit variable cost)o have an approximate price levelPricing based on demandskimming pricing high price when hungry initial buyers are not price sensitive penetration pricing low price to attract buyers (wii)prestige pricing signal quality with the priceprice lining set of prices done a product line (ex. bauer 70, 80, 90, apx) odd-even pricing prices ending in .99 take care lowertarget pricing when a specific price to buyer is a finis bundle pricing price for a box of multiple products yield management pricing catch demand and total dynamically to customize prices Pricing based on cost example mark-up add a fixed percentage to the cost of all equal items cost-plus pricing add a mark-up to the cost (consulting) experience draw in pricing lower the price as your own costs come down the learning curve Pricing based on profit (little role for demand and competition) target profit pricingtarget return-on-sales pricingtarget return-on-investment pricingPricing based on the competition popular pricing (ie. Swatch, chocolate bars) (all the same) price above, at or below similar productsLoss leader pricing sell something at a discount to get people into your store oSet up the list (quoted) price whizz price for all flexible pricingMust be tenacious with all products in product lineMust be profoundMust be consistent with client perceptions of productNeeds to avoid price-cutting by competitorsPrice cut only when you can win (rare)Have cost or tech payoff over rivalsoMake adjustments to the priceDiscountsQuantity, BOGO seasonalFunctional/TradeCashAllowancesTrade in allowance for buyerspromotional allowanc eEDLP (no need to wait for sales)Geographical AdjustmentsTransportation/shipping costs and whether buy or seller paysMarket mix over product life cycle (Place/ acquits)Limited, build, selective, more intensive dispersal, fewer selectiveChannelIndividuals or firms that help get the product/service to the end drug userB2C directly, or use intermediary, such as future shop (less contacts) oRetailers are arguments (but so are distributors and resellers)Benefits of direct convey (producer to seller)Greater envisionLower variable cost precede contactQuicker reception to changesNo need to look for middlemanInternet makes direct distribution easyBenefits of indirect channelsFewer contacts to manage stinkpot match product assortment with customersLess need for producer to have a sales presenceAllows multiple channels for same productorchard apple tree through site, apple store, BestBuyLeverage a channel provide with existing customer relations oLower fixed cost (no sales team)Conflict s between channel partnersVertical conflictIssues in chain (producer to retailer)Horizontal ConflictIssues at same level (retailer to retailer)Challenges of moving from indirect to directMay stand distribution (disintermediation)Buyer loyalty to retailer not product spare costs involved (e-tail, shipping, sales, customer services) Factors in choosing a channelBusiness environmentCharacteristics of your customersWho, what, whereCharacteristics of your product (complex or evangelize)Ice-cream vs. jetsCharacteristics of your company (B2B, global, languages)What channels and intermediaries are near profitableLecture 104th P, PromotionsThe communication processoSee map in lecture notes by ChrisThe promotional mixWhat communication tools are availableAdvertisingVary Expensive (variable_, provides reasons to buy products Control over channel of subjectLarge numbers see message wicked to determine responsePersonal sellingFace-to-faceVery high-ticket(prenominal) (fixed cost)Control over message (sales people can differ(Targeted receiversImmediate responses creation relationsUnpaid, non-personal communication, from third partyLittle control over messageHighly credible, not seen as self-servingHard to know responsesSales promotionSamples, coupons, rebates76% of marketing expenditures for packaged goodsShort run (decline in advertising efficiency)Control over message (not building loyalty)Immediate receptionDirect marketingOver phone, or internetMass or micro, becomes annoying (telemarketers)Control over messageTargeted receivedImmediate responses developing the promotional mixIn product life cycle to inform, to persuade, to remindProduct characteristicsLevel of complexityMore complex, more personal selling strength Risk (financial, social, physical)Greater run a risk, more personal selling accessory services (service/ support required post sale) Advertising establishes reputationDirect marketing can describe customizationPersonal selling builds buyer self-relian ce and provides evidence of customer service oKnow your target marketWho is buyer and what is buying behaviourPlace of purchase, reason, how big is market (mass or custom, first time or repeat oDecision stage of buyerSee chart in Chris lecture notesoChannel strategyPush (want channel to sell it, target channel not end consumer) Push product through channel with goal of getting channel members to push it to customers Direct promotional mix to channel members to gain cooperation Personal selling and sales promotions play major roles move (channel users want to get it from you, targeted at end consumer more) Product is pulled through channelsDirect promotional mix at ultimate consumers to encourage them to demand product Mainly advertising and direct marketing to reach end consumers Developing, executing and evaluating the integrated marketingcommunications program oCoordinates all promotional activities to provide a consistent message across all touch points oKnow target audience and how to market to themoIMC Program 3 stagesPlanning itemAwareness, interest, evaluation, trialSet budget based offo% of salesCompetitive parityAll you can affordDesign promotion, document itImplementationExecute the promotion planCarry out promotionControlPost-test the promotionMake needed changesEvaluating IMCImportant to measure ROIHow more views, traffic to site, coupon redemption rateCan occur during twain implementation and controlLecture 11Three options/Modes for exploiting your new product or technology oLicensingWhen to considerWhen you dont have the resources to trifle it to market and dont want to develop them When you want to get the technology to market fast (win standards race) When you want to stop other firms from R&D and patenting RisksBeneficial only while you have technological advantageCreate a standardStay at leading move onRequires strong IP protectionDependent on others for market successMay lock you into something when market is still emerging oPartnering (selling a component)When to considerWhen you dont have the resources to bring it to market When you want to get the technology to market fastWhen credible partners can be determine and their endorsement sends a signal When you are strategically important to partnerRisksLarger, more established firms can take advantage (price/terms) Partner can deskill youDependent on partnerMarket success and access to info and managementPartner can become disinterestedoDIY (Do it yourself)When to considerCan bring it to market yourself or want to develop capabilities When you have resources to do itUnderstand requirements and behaviour of end consumerWant to brand it with your nameYou have clout with your ecosystem of playersRisksBleeding edge- rivals learn from your mistakesEffort spent on marketing and distribution makes you lag in R&D Lose agility and speedUnderstand market (buyers, competition and overall market (size and growth) Want to devise an entry strategy to leverage advantagesoEmpha size speed for lead timeProduct, technology, people, partners, locationsSet up intangible entry barriers rather than relying only on proprietary advantage like patents oEmphasize selective focusClearly delineate target marketClearly defined partners, channels, suppliersPlus allow for experimentationAdaptable and liquid resources & capabilities (rent, borrow or share)Decision depends onWhere you see future of companyStability of industryValue to other playersPotential for IP protectionBecoming a platform leader attention platform is foundation technology or service that is ingrained for a broader, interdependent ecosystem of business Requires innovations to be usefulNo longer downstairs full control of originator, may contain propriety elements oNeed to decide if you are going to purse a product or platform strategy oAchieving platform status requires specific decisions that governTechnology evolutionProduct and systems designBusiness relationships within ecosystemoMany companies dont succeed as they fail to tackle both TechnologyDesigning right interfaces, architecture, disclosing IPBusinessMaking key complements, introducing incentives, defeat competing platforms oPlatform potentialMust satisfy two prerequisite conditionsPerform at least one necessity function within system of use or solve an essential tech problem in an industry Should be easy to touch base to or build upon to expand system of use as well as allow new or even unintended end usersGoogle is coring in internet search. Linus in web server operating systems for tipping. capable Property ProtectionLegal right granted by a government that allows inventor to preclude others from using the same wile for a maximum of 20 years oNeed to demonstrate that invention isNovel non ObviousUsefulSecret when the patent application is filedBenefitsBlocks others from using inventionRaises the cost of imitation by rivalsHelps to raise capital by planetary house a competitive advantage Helps in negotiating rightsoLimitationsRequires disclosure of the invention in all countriesMonopoly is temporaryRivals can often work aroundLong, complex, costly to defendCan be irrelevant if technology moves quicklyLecture 12 Business Start UpEntrepreneurship ApproachesCausal Logic (start with goals look to return)Evaluate opportunities on measurable market demand & competition Select option with highest expected returnSpecify resources needed to get the import you wantMost often used in developed, familiar products/marketsMeans-Based (start with essence avoid loss)Evaluate alternatives based on given set of subject matter + low cost experiments Select option based on affordable loss rather than expected return Obtain pre-commitments with customers, suppliersMost often used in uncertain products / marketsDealing with UncertaintyEntrepreneurs scatter a comfortable level of risk and push to increase return oBankers pick a desired level of return and push to reduce risk